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FLVA calls on Enterprise Inns to soften its rent review strategy

By Michelle Perrett , 29-Nov-2012
Last updated on 29-Nov-2012 at 18:23 GMT2012-11-29T18:23:27Z

FLVA calls on Enterprise Inns to soften its rent review strategy

The Federation of Licensed Victuallers Associations (FLVA) has challenged Enterprise Inns to soften its rent-review strategy in the wake of its claim that average licensee income is £45,000 per annum.

On the day the company posted its annual report last week, chief operating officer of Enterprise, Simon Townsend, said: “We estimate that the average licensee income is around £45,000 per annum, including the £10,000-per-year live-in benefit.

“Our income per pub currently stands at £65,000 per annum, while the Government/HMRC takes an annual £145,000 in VAT, duty and other taxes for each pub in the estate.”

He also said that like-for-like rents have fallen 12% and average beer discounts have risen 75% since 2008.

However, president of the FLVA, Nigel Williams, said Enterprise needs to change its approach to licensees in the wake of the announcement.

He told the Publican’s Morning Advertiser: “If that is the sort of money that Simon Townsend thinks we should be earning, then I think Enterprise should be a lot softer in its rent-review negotiations.

“Enterprise should make it a lot easier for tenants  to negotiate a rental figure to match that sort of level of income, rather than stick for every penny like they do and try to leave a tenant with £20,000.

“The average income in the north of England must be considerably lower than that and I guess there would be a lot of people that would love to say they earn that sort of money.”  
Williams said that he and representatives at the FLVA would be using these figures when negotiating rent reviews for their Enterprise licensee members.

This would mean a profit and loss account that would specify earnings of £35,000 per annum for all rental negotiations.